The ongoing coronavirus pandemic, a public health crisis beyond imagination, has not only caused thousands of fatalities but is also responsible for the massive disruption of the American economy. According to bbc, there was a 32.9% contraction of the U.S. economy in the first quarter of FY 2020-21, which is the sharpest ever decline since 1947 when the government started keeping records. A few insights into the most likely economic impacts are below by Joseph F Lopresti.
Typical Households Will be Under Severe Pressure Due to Unemployment and Loss of Income
The impact of the pandemic on the average American household is likely to be severe, especially because it came unexpectedly after a decade of robust economic growth, low unemployment, reduction of personal debt, and a strong trend of job growth. Even though the average American household has a lower debt burden than before, it is very clear that many households do not have the financial resources to deal with the crisis that caused the loss of jobs and additional expenses for healthcare.
The Contours of the New Normal are Unknown at Present, Warns Joseph F Lopresti
It is highly unlikely that Americans will be able to resume their lives exactly how they do before the pandemic struck. It is expect that offices and factories will be some of the first workplaces people will return to, with the overriding condition of maintaining social distancing. Personal beauty and healthcare sectors are likely to rebound faster as well as they will be relatively easier to implement crowd management. This is same for retail outlets that can enforce crowd control. Lifestyle, entertainment, and hospitality sectors that typically have a large number of people present together such as cinemas, concerts, sporting events, and restaurants, will bounce back only when they think it is safe enough and the government guidelines allow them to reopen, perhaps with restrictions.
Environmental Benefits Unlikely to Be Sustain Due to Economic Slowdown
One of the most significant benefits of the coronavirus pandemic striking economic activity is the drastic reduction of environmental pollution, cleaner rivers and oceans, less smog, and more. While this has been hailed by the green brigade as a way forward for a green resurgence of our planet and arresting climate change, it is very unlikely that the positive impact of the economic slowdown will persist after industries and offices reopen and more cars, buses, trucks, and planes go about. While staying at home and turning off the wheels of the economy cannot possibly be a solution for restoring environmental balance, certain trends on the restriction of unnecessary travel, increase in teleconferencing, online transactions, remote working, and more are expected to remain and rise over time, observes Joseph F Lopresti.
Conclusion
The pandemic has had a deep impact on the economy and because no one is certain how long it will take for the threat level to pass, it looks like the U.S. economy is inevitably head towards a lasting slowdown or even a recession, the likes of which the current generation hasn’t experience before. Even though the government is expect to continue taking measures to pump the economy, many people and businesses will likely be severely impact before the resurgence can happen.
